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Every convenience store that starts business is constantly challenged to handle problems related to distribution network and inventory merchandising to retain interest of customers on a regular basis. The large variety of their items which require choices in each division like dairy, food, products, grocery and other products of convenience make it difficult for c-store owners to handle inventory effectively. The most common problems faced by convenience stores in effective management of channels of distribution and managing merchandise and inventory to ensure steady sales of stock and reduce chances of stock reduction. As convenience stores deal with both food and non food products their clientele is more diverse and their volumes are also larger than regular grocery stores.
Influx of social media and online shopping makes it even more challenging to manage distribution as both retailers and wholesalers are under pressure to show results and have to gauge consumer sentiment based on both online and offline trends. C-store executives have to now manage store operations and also react in quick time to changing trends in customer demand. When unforeseen circumstances occur like natural calamities, political problems and unethical practices by manufacturers to increase their profits, it can lead to further strain on supply chain networks. The latest challenge that distribution chains are facing is international trade which is unpredictable and is negatively affecting the supply chains of c-stores which depend on imported products.
Distribution channels
Wholesalers and distributors depend on the steady demand for their products by c-stores and grocery store owners to keep their process running and align their delivery schedules to suit their clients. They take the assistance of facilitators like independent warehouses, C&F agents and transporters to keep both manufacturers and retailers satisfied with deliveries and pickups at the right time and at right price. An efficient logistics and supply system can reduce costs of distribution and delivery thereby providing competitive edge to the retailer against other rivals in the markets. For any retailer timely availability of products is crucial as some has specific shelf life and delay in bringing them to stores can lead to wastage of time and money by distributor.
Challenges in distribution of food products and beverages
To keep their stores well stocked so customers can have a wide choice among new and existing product categories means that now stores have to manage several more delivery trucks on a daily basis. If store owners are faced with deliveries during peak customer crowd times then it becomes challenging for the employees to handle both situations. Food distribution is carried out on a weekly basis due to their short shelf life and to ensure that essentials are always available when people require them.
Beverage distribution is done by the manufacturers that use their own transportation facilities to maintain right temperature and quality and avoid chances of contamination during transfer. While these manufacturers want to maintain direct store delivery from the factory to keep the price at a competitive level it is frequently done by third parties who are specialized in this field. The process is still too slow and has to be automated which can reduce costs further and improve customer service. Challenges in this sector can be reduced by introduction of technology and tracking systems which will help manage inventory and schedule deliveries within existing transportation system.
Reducing inventory, product returns and out of stock situations – To run a profitable distribution system your inventory management has to efficient enough to keep it for minimum possible time within a warehouse. While grocery wholesale distributor have to make decisions based on service agreements with their clients they also have to keep in mind the perishability of their products which can lead to product returns. To avoid this situation storage and delivery has to be done accurately to reduce package or product damage and full acceptance of delivered inventory. When grocery distributors are able to manage their orders and deliveries efficiently there are minimal chances of surplus inventory and shelf space of c-store is also utilized in an optimum manner.
Planning and communication – Convenience product distributors work in a highly competitive environment where time plays a critical role between success and failure. Product orders are taken from grocery stores and c stores on a monthly or bi-weekly basis and trucks are packed with well planned route maps which given them a list of stores or warehouses wherein the inventory has to be delivered. The planning is done well in advance to allow synchronized action and make scheduled deliveries so stocks are replenished at stores in the right time to reduce chances of “no-stock” situations. Problems arise if regular updates are not communicated to delivery personnel in advance and then precious time is lost in trying to make urgent deliveries which drives up the cost of inventory.
Scheduling and route optimization – To remain competitive and eliminate waste distributors have to constantly seek effective means of getting inventory delivered to end retailers with minimum expenditure on fuel costs as well as loading, unloading and merchandising. By usage of latest communication technology and tracking devices distributors can now be more responsive to demands of their customers. Depending on their requirements, c stores can now interact with distributors to make changes in their scheduled deliveries to suit their inventory situation which can help them get discounts if distributors are able to offload a larger part of their inventory.
Collaborative solutions between all the parties involved in the distribution cycle can help integrate distribution networks more proactively to help all business partners understand the origin of their products and also the best way to track them within the supply chain. Retailers are most vulnerable part of a supply chain and cannot replenish their stocks when faced with unexpected events. Under these circumstances increased communication and collaboration between all partners will enable smooth transition of products from manufacturers to retailers so they are able to meet customer demands on time. Retailers have as much interest in an effective logistic system as their distributors, intermediaries and manufacturers as all the entities are interdependent on each other.